Offer sells 12% unsecured subordinated notes with 16 million warrants
By Devika Patel
Knoxville, Tenn., Jan. 7 – Lilis Energy Inc. arranged a $3.6 million private placement of 12% unsecured subordinated convertible notes on Dec. 29, according to an 8-K filed Thursday with the Securities and Exchange Commission.
The notes are due June 30, 2016 and convert to common stock at $0.50 per share. The notes may be prepaid at 103 in the first 120 days and at 105 after 120 days.
Investors also received warrants for 16 million common shares. Each three-year warrant is exercisable at $0.25, a 38.89% premium to $0.18, the Dec. 28 closing share price. The conversion price is a 177.78% premium to that price.
Investors included chief executive officer and director Abraham Mirman, who invested $500,000, director Ronald D. Ormand who invested $1 million, and shareholder Pierre Caland, who invested $300,000 through Wallington Investment Holdings, Ltd.
Proceeds will be used for the $1 million refundable deposit the company paid to Brushy Resources, Inc., a $1 million payment to Brushy’s senior lender, Independent Bank, as part of the company’s planned merger with Brushy, up to $1.3 million in interest payments and for working capital and accounts payable.
The oil and gas company is based in Denver.
| Issuer: | Lilis Energy Inc.
|
| Issue: | Unsecured subordinated convertible notes
|
| Amount: | $3.6 million
|
| Maturity: | June 30, 2016
|
| Coupon: | 12%
|
| Conversion price: | $0.50
|
| Call: | At 103 in the first 120 days, at 105% after 120 days
|
| Warrants: | For 16 million shares
|
| Warrant expiration: | Three years
|
| Warrant strike price: | $0.25
|
| Investors: | Abraham Mirman (for $500,000), Ronald D. Ormand (for $1 million) and Wallington Investment Holdings, Ltd. (for $300,000)
|
| Pricing date: | Dec. 29
|
| Stock symbol: | Nasdaq: LLEX
|
| Stock price: | $0.18 at close Dec. 28
|
| Market capitalization: | $6.07 million
|
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